For a major country with extensive capital flows, what is the effect of a decrease in interest rates?
a. a currency depreciation and increased net exports
b. a currency depreciation and reduced net exports
c. a currency appreciation and increased net exports
d. a currency appreciation and reduced net exports
a
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The default risk premium is
A) relevant only for securities issued by very small companies. B) the additional yield a saver requires for holding a bond with some default risk. C) zero for corporate bonds, but quite substantial for corporate stock. D) constant across the business cycle.
Suppose when the price of pineapples goes from $5 to $3 per pineapple, production decreases from 3,500 pineapples to 2,000 pineapples per year. Using the mid-point method, the percentage change in price would be:
A. 0.50 B. 50 percent C. 0.54 D. 54 percent
If the average market price for haircuts increases, all else equal, which of the following is LEAST likely to occur as a result?
A. Some workers will leave other jobs in order to become hair stylists. B. Many salons will go out of business. C. Existing salons and barber shops will hire more stylists and barbers. D. More new salons will open.
Which of the following is a liability of a family?
A. House B. Mortgage C. Share of stock D. Checking account balance